Kick-Ass New Years’ Resolutions

It is common to come up with New Years’ resolutions in January that reflect the way we feel after all the celebrations over Christmas and New Year.  We can pretty much guess that the resolutions will revolve around:

  • Partying less;
  • Eating more healthily; and
  • Exercising more.

That’s all great, however these reflect only the prior three weeks.

What if we could put together resolutions that reflected the prior year or several years?  These resolutions would generally revolve around;

  • Holidaying more frequently;
  • Spending more time with family and friends;
  • Purchasing a house or paying off the one we have; and
  • Becoming more financially independent and secure.

These resolutions are great to work with, and the good news is that they don’t exclude the first set of resolutions – there is no reason why we can’t do both!  Here are the top three questions I am asked by clients starting their road to a “kick-ass” financial future.

  1. WHEN SHOULD I START?  NOW, NOW and NOW!  It’s easy to think that you don’t have anything yet and don’t earn a lot so can’t start – but it’s wrong!  I started saving at 18 years old by putting away $70 a month in a savings plan.  This isn’t a lot but I found I didn’t miss the money.  When it was time to buy a house 12 years later I was well on my way to a deposit.  Remember that everyone has to start somewhere.
  2. HOW OLD SHOULD I BE TO START PLANNING A “KICK-ASS” FINANCIAL FUTURE? There’s no age required, but start now! The sooner you start the sooner you are on your way.  We have probably all heard the Chinese proverb “A journey of a thousand miles begins with a single step” and I suspect we all use this.  I know I think of that whenever I have to complete a mammoth task.  Runners often count steps on long runs, cyclists count kilometres and we all count sleeps to Christmas [even if it’s for our kids].  The best way to achieve anything is to simply start.
  3. OKAY, I’M GOING TO START – WHAT DO I DO?  There are several things to do – all steps on your journey to a “kick-ass” financial future.  Don’t be overwhelmed and don’t think you need to do them all today.  Here are a few things to look at, and I recommend aiming to tackle one item per month [or two months if your life is hectic]:
  • Review your income protection insurance. You may or may not need it, and it totally depends on your circumstances.  However, if you are the main income earner for a family and you have others relying on your income, you at least need to review it.
  • Have wills and powers of attorney prepared. Again, horses for courses, but if you have children you at least need to consider who will look after them if you are no longer able to.  Make sure you document your wishes as it isn’t enough to verbally pass them on.
  • Review your death cover. Once again, you may or may not need it, but if there will be debts within your family should you pass, you need to at least consider whether you should have death cover that is sufficient to pay off the debts.
  • Review your superannuation. Your super may be able to include income protection and death cover, so you may want to review this first.
  • Start saving. A financial plan, or even a small savings goal will put you on the right path.  Set a budget and put away even a few dollars each week.

If you decide you want to start your journey to a “kick-ass” financial future, contact us!  Our team can cover the financial advice, legal and accounting to get you on your journey.

If you just feel like you’d like more information and want to learn more before you start – our Health and Wealth seminar is for you.  It’s free and will give you lots of practical tips to start your journey.  You’ll also have the chance to meet our team in a casual relaxed setting.  Just go to our website and use the links to register.

 

Krystine Canny-Smith – Director

CPA

Making Sure Your Small Business Doesn’t Break the Bank these Holidays

If you are like most small businesses, you may find Christmas and January the hardest time of year for cash flow!

Tradies find there is no income as building ceases and materials that haven’t already been received aren’t available until February.  This effects not only those directly in the building trade, but also concreters, plasterers, glaziers and everyone who supports the building trade.

For small businesses like ours, who support other small businesses, we find our clients close over the New Year and January.  It’s not just accountants though who are effected by this, it’s commercial cleaners, security firms, lawyers and all whose services support small businesses.

And if you support the education sector, then you can look forward to closing shop for around six weeks!  Small businesses that run schools (sport, art, dancing and music schools come to mind) or support education (cleaning, security or education providers) can be confident there won’t be much hitting their bank account in January!

Yes, things get hard when cash flow is tight, but there are a few simple things you can do to help manage it.  Remember that forewarned is forearmed!

  1. Talk to your clients/customers and let them know you need them to pay before Christmas. If you are able to reduce your outstanding debtors and get this money in the bank, it will help cover the Christmas wages and also January when receipts are low.  Ideally, all your customers should finalise all accounts that are over 30 days before Christmas.  This will make an enormous difference to your cash flow.
  2. If possible, invoice clients in advance.  A very clever client of ours (who shall remain nameless and who knows exactly what work will be provided in January), offered her customers the opportunity to pay in advance.  If you operate a larger business, it may be convenient to pay January in advance to your suppliers.  Then you won’t have to worry about bills over the holiday period.  If some of your customers fall in this category, consider invoicing in advance.
  3. Speak to your bank about an overdraft.  Although we generally like to avoid overdrafts and minimise borrowing, there are times each year when you may need extra help to meet the bills.  If you can get approval for an overdraft this is a good safety net.
  4. Last, but not least, put off paying any creditors you can.  Naturally it feels bad putting off paying our suppliers.  However, if we contact them in advance and let them know how much we will be paying and when they are usually happy to accommodate.  We all know from our businesses, that if we know when someone is paying and how much they are paying, we feel more comfortable than if we don’t hear from them or they avoid our calls.

Don’t forget that the superannuation for your employees is due before 28th January 2019, so make sure you have enough in your account to cover that.  Your BAS will generally be due before 25th February 2019 (unless you are a monthly BAS lodger), so thankfully cash flow should return to normal by then.

In the meantime, if you need any help with cash flow or want any information to help you budget over Christmas and January, please don’t hesitate to contact our Accounting team.

 

Krys Canny-Smith

Director – CPA, BComm